- Write by:
-
Tuesday, August 4, 2020 - 9:24:39 PM
-
890 Visit
-
Print
Mining News Pro - Japanese steel producers, mired in one of their biggest postwar crises, are likely to reveal their troubles have crept into the new fiscal year when they start reporting earnings this week.
Nippon Steel Corp., the country’s top producer and third-biggest in the world, and JFE Holdings Inc. have been pummeled this year as the coronavirus pandemic hurts already weak Japanese demand and the domestic industry faces intensifying rivalry from other Asian steelmakers. Analysts expect the companies to report losses in the first quarter after both Nippon and JFE posted record annual losses in the year ended March 31 amid multi-billion dollar impairments.
Nippon Steel reports earnings Tuesday and JFE is expected to release its quarterly figures Aug. 12.
“There’s little good news,” said Takeshi Irisawa, an analyst at Tachibana Securities Co. in Tokyo. “The key focus at their quarterly earnings is whether there are any visible signs that demand will bottom out at some point and head for a recovery.”
Steelmakers outside China have struggled as Covid-19 lockdowns curbed production and demand, with a recent resurgence of virus cases further clouding the outlook for the global economy. ArcelorMittal said last week it remained cautious about a nascent recovery in its core steel markets, and was considering “structural changes” in light of the pandemic.
In Japan, output has slumped after operations were halted at one-third of the country’s 25 blast furnaces, and the crisis has even spurred talk of industry consolidation. Nippon Steel’s president and steel federation chief Eiji Hashimo has previously warned crude steel output could fall below 80 million tons this fiscal year, less than what China makes in a month.
Shares of both Nippon Steel and JFE remain near the record lows reached in April, and they’ve lost a combined $10 billion of their value this year. The Topix Iron & Steel Index has slumped the most this year after the air transportation and mining sectors.
It may take longer for Japanese steelmakers that operate blast furnace mills, like Nippon Steel and JFE, to see an earnings recovery compared with other manufacturing industries due to low volumes and factors such as price cuts and higher expenses, according to Atsushi Yamaguchi, senior analyst at SMBC Nikko Securities Inc. Earnings may not bottom until the third or fourth quarter in a worst case scenario.
Still, Nippon Steel “remains our top pick thanks to its aggressive fixed-cost reductions and restructuring,” Yamaguchi said in the July 22 report. “Over the long term, we expect earnings at the firm to pull ahead of the pack.”
Short Link:
https://www.miningnews.ir/En/News/578840
Top copper producer Codelco reported a decline in quarterly output due to lower quality ore at its aging Chilean mines — ...
Brazil’s Corumba region could more than double iron ore shipments through neighboring Uruguay this year if there is ...
BHP Group Ltd.’s proposal for a $39 billion takeover of rival Anglo American Plc is all about securing plenty of copper ...
When former boss Mark Cutifani left Anglo American Plc in mid-April 2022, things had rarely looked better for the ...
Chile President Gabriel Boric said on Thursday he is targeting an increase in the country’s annual copper output by 1 ...
Brazilian miner Vale SA sees no impact from BHP Group’s bid for Anglo American on the latter’s Minas-Rio project, its ...
Marex Group Plc and a group of the London-based firm’s shareholders raised about $292 million in a US initial public ...
Impala Platinum could cut 3,900 jobs as it restructures its South African operations due to lower metal prices, the ...
Australian Strategic Materials ASM.AX said on Friday it has received a non-binding letter of interest for a debt funding ...
No comments have been posted yet ...